InvestorQ : Why is dollar getting stronger than rupee?
Krimi Gandhi made post

Why is dollar getting stronger than rupee?

Anushri Vasa answered.
3 years ago

Below are some factors that have an impact on foreign exchange rates.

  • Any currency which is demanded across the world, strengthens the currency. This can be achieved by selling goods and services of the country to the world and increased demand for goods and services will lead to a strengthening of Country's Currency. India's products are not as popular compared to US products and so the rate conversion difference is!

  • Political and financial stabilty is also important for any country to attract foreign investment. As US has a Stable economy compared to India US Dollar is stronger than Indian Rupee.

  • Trade Balance also plays an important role. Since India Import a lot from Oil & Gas to FMCG, to Financial Services, to Healthcare, to cosmetics compare to it export; there is a negative trade balance for India.

Other than the above-mentioned factors, there are many other factors too which determine the conversion rate.